The defendants here are charged with violation of the federal statute covering the interstate transportation of forged travelers' checks, with unlawful or fraudulent intent, under 18 U.S.C. § 2314 par. four. Only the element of forgery is at issue here.

Neither the ingenuity of counsel nor the laborious plowing of the court has discovered a similar scheme in the reported cases. The court cannot comprehend the actions of the defendants in crossing a state line as being done deliberately as part of a scheme to establish a defense to federal prosecution but that suggestion now faces us. The same acts if done within a single state would subject defendants to a variety of state charges. Nor, as shown by the conclusion was reach here, can we accept the suggestion that no federal prosecutor would pursue an action for violation of the federal travelers' check statute under the facts set forth herein.

The matter was heard by the court without jury upon the waiver of jury trial made by the defendants in open court. From the evidence the court makes the following:

Findings of Fact

1. In August of 1978 defendant McGovern owed money to defendant Scull.

2. In order to repay the debt defendants McGovern and Scull devised a scheme to obtain funds through a transfer of travelers' checks.

3. Under the scheme Scull provided McGovern with cash in the amount of $ 2424.00 to purchase $ 2400.00 in travelers' checks issued to McGovern.

4. On August 30, 1978 twenty four travelers' checks in the amount of $ 100.00 each were issued by a branch of Citibank in Niagara Falls, New York to James McGovern who signed each of the checks in the upper right hand corner. These are the checks described in the indictment.

The legislative history of paragraph four shows that it was intended to cover only those instruments commonly known as travelers' checks. U.S. Congressional and Administrative News, pp. 3654-55, 3656-57 (1968).

A number of cases have been cited to us which were decided prior to the 1968 amendment and are mostly of limited value because they were brought under paragraph three of Section 2314 which includes in the offense the words "falsely made, forged, altered, or counterfeited securities". A distinction is now drawn between the forgery requirement at paragraph four and the falsely made requirement of paragraph three at § 2314. U.S. v. Huntley, 535 F.2d 1400 (5th Cir. 1976).

Thus, we are limited to the question of whether the signature described in the findings of fact constitutes a "forgery" under paragraph four of Section 2314.

In Gilbert v. U.S., 370 U.S. 650 (1962) it was held that the crime of forgery is defined by the common law as it existed in 1823.

A series of cases cited by defendants stem from U.S. v. Sonnenberg, 158 F.2d 911 (3rd Cir. 1946), in which the defendants were charged with forgery under 18 U.S.C. § 73. The essential question in that case was the existence of authority to sign another's name. The court, finding such authority, and further finding no evidence of intent to defraud, reversed the conviction.

The cases cited by the defendants all rely on the principal set forth in Sonnenberg. All have as their essential question the existence of authority, express authority or implied authority, to sign another's name to a document, and the adequacy of the charge given to the jury on the question of authority. See, United States v. Gilbreath, 452 F 2d. 992 (5h Cir. 1971); United States v. Lewis, 592 F 2d. 1282 (5th Cir. 1979).

However, in the present case we are not dealing with the question of the authority of Scull to sign McGovern's name to the travelers' checks. Both defendants insist that such authority was given and that therefore there can be no forgery. However, the very authority given was part of the scheme to defraud.

If this claimed authority were valid and legal there would be no need for Scull to practice making an imitation of McGovern's signature, or to make the false representation to the payee of the travelers check by presentation of McGovern's driver's license that he was in fact McGovern.

Aside from the cases dealing with the existence of authority we find no cases on the exact point of whether the countersignature of the drawer's name made with the consent of the drawer at the time but with the specific knowledge that that consent would be repudiated as part of a scheme to defraud, constitutes forgery as defined in the statute. Under the evidence in this case the intent to defraud is not contested.

Perhaps the closest analogy to the present case is United States v. Wilkins, 213 F. Supp. 332, (S.D.N.Y. 1963), aff'd per curiam, 328 F 2d. 120 (2d. Cir. 1964). In Wilkins it was argued that there was no forgery because the person cashing the check knew that the person endorsing the check with the name of the payee was not the named payee, but took the check upon the oral representation that the endorser had authority to sign the payee's name on the payee's behalf. After an extensive review of the common law precedents, Judge Bryan concluded that:

The emphasis on the instrument itself which is of ancient origin (See Rex v. Jones and Palmer, 1 Leach 366, 168 Eng. Rep. 285 (1785)) is pointed up by what appears to have been the reasons for declaring forgery to be a crime in the first place-- the need to protect seal and signature so as to safeguard the holder, and the commercial necessity for making the negotiability of instruments feasible as a practical matter.

Id. at 338.

The court concluded that the oral representations of authority were wholly irrelevant. The signature was placed on the instrument to make it appear that it was a valid and genuine instrument capable of negotiation and requiring ultimate payment by the drawee, when in fact it was not. "I see nothing in the common law which brings this case within the category of 'per procuration' or agency endorsements without authority held not to be a forgery in such cases as Gilbert (v. United States, 370 U.S. 650 (1962)); Selvidge (v. United States, 290 F.2d 894, (10th Cir. 1961)); and Regina v. White (2 Car. & K. 404, 175 Eng Rep. 167, (1847))." Id. at 338.

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